5th Feb 2016 07:15
LONDON (Alliance News) - BG Group PLC on Friday reported full-year results that met market expectations as a 16% fall in revenue caused a steep drop in underlying earnings.
The company, which is set to merge with Royal Dutch Shell PLC, reported business performance earnings, which excludes special items and measures the underlying performance of the business, of USD1.69 billion in 2015 compared to USD4.03 billion a year earlier after revenue dropped 16%.
Underlying earnings before interest, tax, depreciation and amortisation dropped 39% to USD5.63 billion from USD9.17 billion whilst underlying earnings before interest and tax fell 62% to USD2.42 billion from USD6.37 billion a year ago.
However, including special items such as disposals and impairments, BG Group managed to report Ebit of USD3.17 billion compared to a USD1.57 billion loss last year, whilst earnings from continuing operations totalled USD2.32 billion, swinging from a USD1.05 billion loss in 2014.
BG Group didn't manage an overall profit, reporting a pretax loss of USD1.16 billion. However, that is still significantly narrower than the USD8.33 billion pretax loss in 2014. Before special items, BG managed a USD367.0 million profit compared to USD1.15 billion profit in 2014.
"This strong operational performance is the result of the capability and commitment of our teams across the organisation and we will deliver a high-performing business into the combination with Shell," said Chief Executive Helge Lund.
Shell published its full-year results on Thursday, reporting an 80% fall in current cost of supply(CSS) earnings to USD3.84 billion from USD19.04 billion a year earlier, whilst underlying earnings more than halved to USD10.67 billion from USD22.56 billion.
That was the result of lower oil prices and a fall in production causing a 37% drop in Shell's revenue to USD272.15 billion from USD431.34 billion. Costs related to impairments and restructuring costs totalling USD6.83 billion also dragged those CSS earnings down.
BG Group had already stated it wouldn't pay a dividend for 2015 if the merger was approved, but the company's shareholders will be entitled to Shell's 2015 fourth quarter interim dividend of 47.0 cents - which alone is higher than BG Group's 2014 full year dividend of 28.75 cents per share.
The two companies are expected to complete the merger on February 15, and the pair plan to hold a capital markets day on June 7 to outline the enlarged group's plan for the future.
By Joshua Warner; [email protected]; @JoshAlliance
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